Sears to close another 72 stores as sales plummet

Eddie Lampert is going on another downsizing bender.

The billionaire chief executive and largest shareholder of Sears Holdings is closing 72 stores after reporting first-quarter losses and plunging sales.

The struggling retailer said Thursday that it has identified about 100 Sears and Kmart stores that are no longer turning profits, and 72 of those locations will be shuttered soon.

Revenue tumbled more than 30 percent to $2.89 billion, and the Hoffman Estates, Ill.-based company lost $424 million, or $3.93 per share, in its first quarter.

All the while, Lampert has been busy selling nearly anything of value Sears owns, including real estate, its storied Craftsman and Kenmore brands and more recently its credit card portfolio, to raise enough cash to stock its remaining 820 Sears and Kmart stores.

Last week, Lampert struck an unusual deal with Citigroup — its longtime credit card partner — to raise $425 million in instant cash.

The companies re-upped their contract, with Citi paying Sears $400 million up-front to “secure our ownership of the [MasterCard portfolio] in any future scenario,” said Stephen Bird, Citigroup chief executive of global consumer banking, at an investor meeting this week.

Most credit card issuers pay retail partners a small fee up-front representing about 10 percent of a deal, according to payment card consultant Robert McKinley of RAM Research.

“Sears is essentially losing all of their rights in the program and handing it over to Citi,” McKinley added.

An amendment extending their agreement gives Citi final control over the credit card portfolio, in which Sears customers earn loyalty points for their spending.

“A new financial company could not buy the portfolio unless Citi wanted to sell it,” said David Robertson of The Nilson Report, a card payment newsletter.

Sears shares closed down 12.5 percent, to $2.81.